<p>The bulk of our retirement savings is in my husband’s 401K. His company is financially sound as he manages the money flow and is aware of what is going on there. However, I just read in the paper that the investment bank that manages the 401Ks is another institution that is in trouble and was described in the paper as “embattled”.</p>
<p>If this financial company went under, would we still have access to our money in our 401K? Right now I have most of it invested in a money market run by this firm and a small amount in a bond/fixed income fund. We were taking a terrible beating when the money was in equity/stocks.</p>
<p>I am not too thrilled that we have all this money in a 401K with no insurance like FDIC for security.</p>
<p>… although in general money that’s invested in funds should generally be safe since the company can’t really raid those funds to pay for it’s own expenses and debts. Also, the performance of those funds shouldn’t really be linked to the financial performance of the company (or at least not too much). </p>
<p>If it’s a major firm with ‘mutual fund’ type investments then you should be OK, but if it was a hedge firm type investment then you would probably just lose it if the company went bust (although if you were investing in hedge funds I doubt you’d be posting such questions on this board ).</p>
<p>You need to talk to a financial advisor. If you are more than 5 or so years from retirement, there’s no reason for your funds to be almost all in a Money Market and with a little bit in a bond fund. Yes, the market is down now, and you may have gotten “hammered” recently - but if you just left your stock investments alone for the long run, they almost certainly would have recovered. By taking the money out of stocks when the price was down, and putting it into a money market, you have turned a “paper” loss into a real loss, and when the market turns back up you will miss out.</p>
<p>Look for an advisor that is fee only. You’ll pay him/her for their time, and he/she won’t have an incentive to put you into investments that are inappropriate so that he/she can get the commission.</p>
<p>As for safety, the monies in a Mutual Fund belong to the person who deposited them, not the company that invests them. The investment company couldn’t raid them even if they wanted to.</p>
<p>Definitely… this is one of the biggest mistakes that investors make. If your in it for the long term then what’s happening today is really of no concern (even if the market isn’t doing so well). There have been extensive studies that show the best thing to do is to do essentially nothing. If you get scared and pull out you’ll likely just lose money in the long run by missing out on the ‘boom’ that always follows the ‘bust.’ You’re standing on the sidelines now, but by the time you feel safe to put things back into the market again (after things go up again) everyone else will have already left you behind in their dust.</p>
<p>Think about this. The management firm is run by people. If that firm would have problems, what would happen to the people? If you interface with people, which may not be the case because of automation, who do you talk to? The assets may be there, but will there be people there to interface with.</p>
).</p>